Aldermen vote on sales tax proposal

January 22, 2013 10:16:22 AM

Voters in the Golden Triangle, and across Mississippi, may soon be able to raise their own local sales tax without the hassle of getting state approval.

The Starkville Board of Aldermen voted 5-2 to formally endorse the Citizens for Economic Development Act, legislation that would allow municipalities to temporarily raise their local sales tax one cent to help fund capital projects. The tax increase could only be enacted if 60 percent of voters support a project.

A resolution is being drafted and will be presented to the board at its Feb. 5 meeting.

Starkville joins more than 50 other municipalities in the state who are backing the Mississippi Municipal League's proposed bill.

"I really want to get people to understand that small cities and towns definitely have a benefit pushing this," said Quincy Mukoro, director of public and governmental affairs at the MML.

Ward 2 Alderman Sandra Sistrunk, who made the motion to draft the supportive resolution at the board's previous meeting, agreed with Mukoro, saying even if the legislation passes, it does not necessarily mean municipalities are obligated to use this option.

"There might be some cities with projects on the books and, if this passes, they would be able to use it immediately, but there may be cities that never use it," Sistrunk says. "It's just an option that will allow municipalities another funding source as opposed to immediately turning to property taxes."

Currently, capital projects are either funded through existing revenue streams -- including projects funded through bond debts -- or through an increase in property taxes.

Sistrunk believes the legislation has a broad enough definition of capital projects that any project that gains a 60 percent of the vote would be eligible for the tax.

"From sewage to streets to buildings to drainage, everywhere the city invests its capital dollars," she said. "It's completely up to the municipality to decide what they want to do with it."The tax would be terminated once the debt for the project is paid off. If the city wants to use the increase for another project, another vote must be held.

The one-cent increase would apply to anything that is subject to the state's seven-cent sales tax. The only exception would be for communities that already have additional local sales tax, like Starkville. Because Starkville already has an additional two percent sales tax on food and beverages, those commodities would be excluded from the one-cent increase.

Sistrunk says one of the biggest factors in her decision to ask for support for CEDA is that in order for the tax increase to be enacted, 60 percent of the voters have to support the project it would fund.

"That's just difficult to get," Sistrunk said. "It has to be something the community is really supportive of, so I feel it'll police itself."